IKEA, the Swedish home furnishing giant, is keen to expand its footprint in the growing Indian market. The retailer recently made announcements of opening stores in Hyderabad and Navi Mumbai, and now the news has just come in that the company is mulling over setting up its maiden production unit in the country.
Peter Agnefjäll, President and Chief Executive Officer of IKEA informed PTI, “It is important for us to set up our production unit in India. We sell products which are inexpensive. You cannot distribute these inexpensive products over long distances because if you do, you would ruin the margin of the product. So, it’s important to go for local production. If we have the right technology, right raw materials which exist there, we can combine with the knowledge of IKEA and turn into a fantastic product.”
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IKEA, which received Indian Government’s nod in 2013 for its Rs. 10,500 crore proposal to open retail stores under 100 per cent Foreign Direct Investment (FDI), notes that there’s enormous potential in the Indian market, and the company aims to explore that to fullest. “We are estimating…; we need to invest more than Euro 1.5 billion in the coming period in stores and distribution,” mentioned Agnefjäll, adding, “Overall, we are saying we would double our sourcing from India by 2020.”
